The Tantalizing Promise of Today’s New Modular Homes

Once again, housing prices are top-of-mind for those of us in the Bay Area, especially young professionals and recent immigrants, as the median 1-bedroom rent for San Francisco hits an all-time high of nearly $3,700 and the promise of even more skyrocketing rents very soon. Similar stories — though perhaps not quite as extreme — are playing out for renters in major cities across the country.

Young people dreaming of home ownership for the first time are largely faring no better, with healthcare and education costs at all-time highs deterring many recent graduates. It’s never been harder to buy a home, and whether or not the recession on the horizon comes to pass, that isn’t likely to change in the long term.

There is an intermediate step, however, for hopeful home owners: modular homes.

Generally associated with cheap mobile homes and trailer parks, the modular or homes of the future are breaking away from the norm. Innovative, sustainable, and often quite inexpensive compared to homes built through traditional methods, modular homes will soon become a viable path to home ownership for many young professionals today, urban or otherwise.

The Kasita compact house

What’s the appeal?

Modular, or prefabricated, homes are constructed out of one or more blocks, or modules. Whereas a traditional manufactured home is based on a unique, self-contained design that is brought to life on-site, a modular home is pieced together from standardized units that are built off-site and then transported to the owner’s lot.

The modular method of construction is immensely economical, reducing design and materials costs, as well as the most significant cost of all: labor. Most of these savings can be attributed to the standardized “assembly line” approach to building modular homes, as well as the dramatic reduction in construction time. In the absence of weather delays or design issues, a modular home can be built in as little as a few weeks, rather than the six months to a year (sometimes more) expected of manufactured homes.

A reduction in construction costs is a discount that can be passed on to the buyer. Given that about 65 percent of prospective homebuyers are concerned about the cost of a new home, this discount will be a welcome one.

Where the modular homes of the future really distinguish themselves though, not just from manufactured homes but from their predecessors, is in their features. Modern modular homes are often designed specifically with energy, water, and waste efficiency in mind. Moreover, they are integrated with the newest home automation technologies and smart appliances from the get-go.

Acre Designs all-electric, automated Series B prefab home

What the future holds

There is a significant need for a new class of more efficient, affordable homes. Roughly 83 percent of Millennials with student loans and no home blame these educational loans for their housing situation. Much of the remainder can be attributed to lower mean incomes for Millennials, and by all indications, the up-and-coming Gen Z will face the same issues.

Other trends on the horizon may soon build momentum for the modular home revolution.

Remote working has become a lifestyle choice for a growing number of professionals, from salaried employees to self-employed ‘digital nomads’. In time, more workers will embrace this lifestyle, and no longer be tethered to expensive residential areas near urban business centers.

Climate change is set to affect large groups of people as it gives rise to more frequent, more extreme weather events. In time, communities and emergency responders will likely turn to modular homes as a means to shelter those affected by natural disasters quickly and cheaply.

Autonomous driving is getting progressively more advanced, and the day when self-driving car fleets obviate the need for vast parking lots and garages in cities is approaching. In time, vast swaths of land will be available for modular home designs that can be stacked to create whole communities.

A render for stacked Blokable modular homes

And where are these new modular homes?

Not here, not yet, but on the way.

Only recently have entrepreneurs started to apply to new home construction the same principles that have driven tech startups in so many other areas. It is a tremendously exciting space however, with other breakthroughs like the country’s first 3D printed house highlighting the potential of new construction tech.

There will be challenges, however. The innovators driving this new wave of modular homes will face huge capital costs, regulation, and a public that largely has no reason to even consider buying a home but a few times in a given person’s lifetime. Educating the public on the innovations and options in modular homes, and then building a brand for even so infrequent a purchase as a new home, will be essential.

The benefits are clear though, and with every new entrant the space keeps growing. Within the next few years, you may very well see one of the new modular homes on your block.

Marcello Miranda is a tech junkie, and frequently writes on startups. Follow him on Medium and Twitter, and if you enjoyed this content, give a few claps to help spread the word!